#3. Get your loan approved.

Obtain free conditional loan approval before you make an offer. When you are trying to buy a house in a competitive market, your offer to purchase should contain as few conditions as possible.

#4. Think it twice

Don't allow yourself to be pressured by the seller or the real estate agent. Take your time. Make a list of the positive reasons for buying the house. Make a list of the negative reasons for buying the house. This is one of the most important decisions you will ever make. Don't make it too quickly.

#5. Location is the key.

Better location usually means better life and better return on your investment. Look for good neighborhood. Consider neighborhood school quality and crime rates.

#6. Get a home inspection.

Find out ahead of time if the home needs repairs. Don't find out that your roof leaks only after you have moved into the house. A home inspection may cost a few hundred dollars but it's worth it.

#7. Do your homework.

Don't simply accept the representations of the seller or real estate agent. They make money only if the home is sold. Do your own homework.

#8. Choose the right agent.

Find a real estate agent who specializes in the neighborhoods where you want to live. Work with your agent but also shop for a home at Internet sites such as HomeGain and Realtor.com.